How Successful Companies Synchronize Business, IT

Gartner's Marianne Broadbent says smart companies use IT to sense change so business executives can respond faster to shifts in the marketplace, in ways that boost the bottom line.

Marianne Broadbent wrote her doctoral dissertation at Australia's University of Melbourne in the late 1980s on the need to align information technology and corporate strategy.

Has the alignment gap eased since then? "Things have gotten better, and they've gotten different," Broadbent told CIO Insight Executive Editor Edward Baker in a recent interview. "There is much more penetration of CIOs involved in strategy-setting as part of the executive team, chiefly in organizations where IT is important to how the organization competes."

Broadbent, who coauthored Leveraging the New Infrastructure: How Market Leaders Capitalize on Information Technology (Harvard Business School Press, 1998) with Peter Weill, is vice president and director of research at Gartner Inc.'s Executive Programs Worldwide, where she investigates such issues as the fusion of business and technology strategies and investments.

CIO INSIGHT: How do you define strategy?

Broadbent: Strategy is very much about synchronizing the enterprise with its external environment as much as possible. Think about how increasingly interconnected economies, markets, technology and political situations are. Sept. 11 is a great example of how quickly things can change and how interdependent logistics, for example, is with strategy, with customer service, with the politics of what's going on at the moment. I look at strategy more as synchronization, and that which focuses much more on what we call the market inputs rather than the outputs.

Previously, for example, what organizations focused on was what they needed to achieve, in fairly granular terms, within the next three to five years. Today, though, organizations are much less focused on that simply because you can't control for as many factors as you could in the past, and the situation is very volatile. In the past, we focused very much on our processes. That's useful, but it's probably not as useful as focusing now on what we call our inputs and aspirations, and I'd link those two together.

I'm not saying that it's not important to plan and strategize. I think it's absolutely critical. But much more, it's a sense-and-respond world where on one level you need to focus on your strategic aspirationswhat you really want to be when you grow upand tie those to what your customers are demanding at any given time. Maybe it's a travel company being like a companion, always there. For a car company, it's being some form of personal communication. So those are aspirations. But then you need to come back and ask, "OK, which business principles do we want to guide us on how to get there? Do we want to do it by being very focused on customers, or do we want to do it by being very focused on cost?" And so on.

Once you decide these things, you can decide which inputs and capabilities are most important to you. What are the attributes we believe we need to have? Maybe it's a very well-trained group of people. Maybe it's a terrific knowledge-based system. Maybe it's a certain kind of technology capability. Maybe it's always having a supreme brand. It's about which inputs are important to you.

When creating a strategy, I see a number of steps: the aspiration, the big business principles or maxims, then having a number of scenarios or options which are based on a set of strategic assumptions that you constantly, constantly pick to see if they are in sync. And then you use that information to shift and change. At a tactical level, that means rolling out products and services in a very careful, risk-managed way so that you can sense and respond to the marketplace.